Omni United sees growth as Tier 3 distributor

SINGAPORE — As founder, president and CEO of international tire distributor Omni United Pte. Ltd., G.S. Sareen has plenty of ambitions.

He has plans to grow the company in the U.S. to serve most every region, plans that include adding mixing warehouses to facilities the company currently operates.

He and his company will continue to support breast cancer research, through a partnership with ladies' professional golf. And he is working on reviving the idea of collaborating with another brand to put their name on Omni United-sourced tires, such as the Timberland Tire that launched several years ago but remains "on ice."

More about that later.

There are two things, though, that he promises he will never do.

First, he won't entertain the notion of building a tire plant. Instead, his company designs the products and contracts with several manufacturing partners, mostly in Southeast Asia, to make the tires.

"We have enough volume to justify a decent-sized plant," Mr. Sareen told Tire Business. "But it would be in one location, one region — China, India, Indonesia, Thailand, America. What if the geopolitical situation were to change? We would be stuck with it."

As it stands today, Omni United is able to distribute its array of tires to 80 countries. Should a tariff be levied by one country on tires produced in another, Mr. Sareen said Omni United has the ability to move tires produced in an affected county to a second country where tariffs haven't been levied.

"These are products that are designed, managed, engineered, the whole shebang, by us," he said. "We are pretty much doing everything a manufacturer will do except owning the facility but having long-term manufacturing contracts."

The second item he won't change is Omni United's Tier 3 standing in the market.

"I don't want to be in any other space," he said. "I think Tier 3 is extremely fantastic, it's big, it's the fastest growing category, and from a business point, it makes perfect sense because it's unstructured. It's very fractured and fragmented, so a little bit of structure into this goes a long way."

He compared his company, at least from a business perspective, to Li & Fung, a Bermuda-incorporated, Hong Kong-based supply chain "mammoth" that sells apparel and other household goods, offering, he said, "fantastic quality at a great price."

"That was a model I thought was really fascinating when I started this business 26 years back. I've tried to basically walk that walk."

Mr. Sareen said Omni United offers not only quantity, but also quality at value pricing.

"Some Tier 2s don't have the range we do," he said, noting the company has put a renewed emphasis on the look of the tire while maintaining its performance attributes.

"Tier 2 is crowded, it's competitive, and I think Tier 3 is a very comfortable space for us," Mr. Sareen said. "I think we can grow enough in this space."

That growth will include adding more mixing warehouses in key regions across the U.S., sooner rather than later.

In 2015-16, Omni United dabbled into the wholesale business with its acquisition of U.S. wholesalers Interstate Tire Distributor and A to Z Tire & Battery Inc., with the goal to become a distribution player.

But in the subsequent years, the wholesale market changed dramatically, as Sumitomo Corp. of Americas and Group Michelin formed National Tire Warehouse (NTW) and Goodyear and Bridgestone Tire Americas combined to start TireHub L.L.C.

"It wasn't profitable in spite of our best efforts," he said of the wholesale market venture.

Omni United reorganized those assets into a mixing warehouse, called Omnisource, to store its products. A U.S. customer, who previously could buy one container from one country of origin, shipped to his store, now can order a mix of Omni United products made in various factories across the globe.

The wait time, he said, has been reduced from 65 or 75 days to seven to 14 days.

"What does it do to my cash flow is it increases my working capital," Mr. Sareen said. "Instead of shipping a container from Thailand to a customer, I have to bring all of these containers into Omnisource, then redistribute and ship them out to all customers.

"I'm OK with that model. I will increase my cost, but I will be able to get a much bigger share of the volume."

Omni United has plans to open mixing warehouses in the Northeast and Southeast, servicing, he said, 75% of the U.S. population.

He has plans to duplicate the operation in Europe.

His commitment to supporting breast cancer research — a hallmark of the distributor in the U.S. — remains strong, despite the fact he said his family have not been touched by the disease.

Since Omni United and Radar Tires started supporting breast cancer research a decade ago, they have funded thousands of hours of research while creating awareness.

"One in eight women in America will get affected by it," Mr. Sareen said. "I have not met a single human being in the U.S. (who has not been affected by it). It's such an emotional subject."

Besides his passion for carbon neutrality, Mr. Sareen said Omni United continues to explore more partnerships to create a global lifestyle brand, similar to past efforts the distributor attempted with Timberland L.L.C, an American manufacturer and retailer of outdoors wear, especially footwear.

He said the cost factor put the Timberland partnership — which employed a true closed-loop recycling model — on hold.

"I still think it's a cool concept," he said. "We are in discussions with other brands besides Timberland to still go in that direction. I still think there is room for a branded tire being sold in the world."

He noted that there is Giorgio Armani-branded furniture and Ralph Lauren-branded paint.

"Brands have entered all aspects of consumerism except the tire business," he said. "I think that will happen. It should happen."

Omni United, he said, has a workforce of nearly 100, with plans to keep growing.

"All of these go hand-in-hand with how successful you are and what you can afford to do," he said. "As we move forward we will definitely be putting more visibility out there."